AI drives industrial internet boom in oil and gas

TL;DR:

• AI and digital twins are set to reshape the industrial internet of things (IIoT) across oil and gas exploration, drilling and production, GlobalData research finds.
• The global industrial internet market is forecast to reach around £433bn ($552.7bn) by 2029, a 16% compound annual growth rate, with energy contributing roughly £62bn ($79bn).
• Upstream operations are furthest ahead, using AI to run remote wells, predict equipment failures and simulate outcomes.

The research, from analyst GlobalData, describes a sector under pressure turning to connected sensors and AI to stay resilient. Oil and gas firms face volatile prices, supply uncertainty and geopolitical disruption — from US tariffs to the Iran conflict — and are embedding IIoT to detect faults early, predict maintenance and enable autonomous operations.

Real-time is the new baseline

Upstream — exploration and production — is at the front line. As projects become more capital-intensive, remote and subject to environmental scrutiny, “real-time monitoring and modelling are now expected, not optional,” the report notes. Digital twins and AI-driven drilling optimisation let operators simulate results, manage wells remotely and integrate new production faster. Midstream, sensors across pipelines and tanks speed leak detection; downstream, automation underpins emissions control and process optimisation.

“Autonomous operations are rapidly becoming standard in digitally advanced oilfields, particularly in offshore environments,” said GlobalData analyst Ravindra Puranik, pointing to cloud-based analytics that improve demand forecasting even in volatile markets. The trend dovetails with wider connectivity shifts: separate research from Viasat found 91% of industrial IoT decision-makers expect to adopt direct-to-device communications within 18 months, with wellhead monitoring a leading energy use case.

For UK readers, the relevance is less about North Sea drilling than the template: heavy industry using AI and digital twins to squeeze efficiency from ageing, distributed assets — a pattern now spreading to utilities, manufacturing and water infrastructure.

Looking forward

The direction is toward oilfields that increasingly run themselves, with humans supervising from onshore control rooms. As with AI elsewhere, the gains — predictive maintenance, fewer outages, faster integration — depend on data quality and integration discipline. For an industry navigating both energy transition and volatile markets, the industrial internet is becoming less a differentiator than the cost of staying competitive.